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If the Central Bank Targets the Interest Rate, and the Money

Question 14

Multiple Choice

If the Central bank targets the interest rate, and the money demand curve shifts to the left, then the Central bank can


A) maintain the interest rate target with no change in the money supply.
B) maintain the interest rate target, but at a lower quantity of the money supply.
C) not maintain the interest rate target.
D) maintain the interest rate target, but at a higher quantity of the money supply.

Correct Answer:

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